Five million Nigerians are at risk of being impoverished as the coronavirus outbreak sparks off the worst recession in Africa’s largest economy since the 1980s, the World Bank said Thursday.
Nigeria, which has the highest number of people living in extreme poverty in the world, is taking a hit from the pandemic as well as from a global oil crash primarily because it is the continent’s biggest oil producer.
The World Bank envisages Nigeria’s Gross Domestic Product to contract by between 3.2-7.4% in 2020, depending on the enormity of the virus outbreak. It said in the worst case scenario, the recession could extend into next year when the economy could shrink by 2%.
“Today’s unprecedented crisis will require an equally unprecedented response from the entire Nigerian public sector (and) private sector to contain the outbreak and protect the lives and livelihoods of low-income and vulnerable communities,” the Bank said in a report on Nigeria’s economic development titled “Nigeria in Times of COVID-19: Laying Foundations for a Strong Recovery.”
The five million people, who stand the chance of becoming poor due to COVID-19, come on top of the 2 million the World Bank had earlier predicted would slide into poverty, with the pandemic disproportionately affecting the poor, especially women.
Altogether, 42.5% of Nigerians will become poor – defined as living on less than $2 a day – according to the multilateral lender.
“While the long-term economic impact of the global pandemic is uncertain, the effectiveness of the government’s response is important to determine the speed, quality, and sustainability of Nigeria’s economic recovery. Besides immediate efforts to contain the spread of COVID-19 and stimulate the economy, it will be even more urgent to address bottlenecks that hinder the productivity of the economy and job creation,” said Shubham Chaudhuri, World Bank Country Director for Nigeria.
Unemployment and poverty have frequently stoked insecurity in the country from militants in oil-rich Niger Delta to the Boko Haram insurgency in the benighted northeast and banditry in the northwest.
The pandemic is equally fuelling inflation while an estimated 70% plunge in oil revenues might further weaken “already low” government revenues at a time when bigger expenditure is required to survive the crisis, the World Bank said.
Nigeria is currently in talks with the World Bank and other multilateral lenders to source around $6.5 billion in funding.